Bitcoin Price Still Has Potential to Dive to $5,500, Yet Macro Uptrend Still Intact

Last week, the one-week Bitcoin chart printed an extremely bullish sign: the golden cross of the 50-week and 100-week simple moving averages, with the former crossing above the latter. (As an aside, a golden cross is when a short-term moving average crosses over a long-term one to imply bulls have control.)

While this is a decidedly bullish sign in the long term, with this signal preceding the 1,000%+ rally seen between 2016 and the end of 2017, a leading analyst has remarked that Bitcoin is still susceptible to one final downturn before an eventual return to the macro uptrend.

One More Dump to $5,500?

CryptoBirb, a strong proponent of the positive effects the aforementioned golden cross will have, recently noted that Bitcoin still has the potential to see one final dump to $5,400-$5,600 — 23% lower than the current price of $7,150. This coincides with the long-term 0.786 Fibonacci Retracement level.

He noted that this would corroborate a trend seen in previous market cycles, which saw BTC see a bullish throwback prior to a resumption of a parabolic uptrend.

Birb’s suggestion that Bitcoin will see one more drop lower has been corroborated by other analysts.

Cold Blooded Shiller, a popular cryptocurrency trader, noted that Bitcoin is in a “markdown from distribution” near the $13,000-$14,000 top, a markdown contained by a descending channel that has existed since the top of the recent bull run.

As it stands, Bitcoin at $7,400 is in the middle of the channel, seemingly in no man’s land, thus not close to a bottom.

“From a volume perspective, there is nothing to me that screams “THIS IS THE BOTTOM.” For both markdowns and markups we typically expect to see “climactic” volume,” Shiller wrote, trying to accentuate that there are no concrete signs the bottom is in for the Bitcoin market.

The scenario he is expecting can be seen below, which shows that the leading cryptocurrency could return into the low-$5,000s, a range that has been identified by other analysts as a potential macro bottom.

See Cold Blooded Shiller's other Tweets

Related Reading: What’s the Best Way to Drive Bitcoin Adoption? Billionaire Says Crypto Giveaways

Macro Bitcoin Uptrend Intact

Despite this, many researchers have claimed that Bitcoin’s macro uptrend remains intact.

Hans Hauge, a senior quantitative researcher at Los Angeles-based crypto fund Ikigai Asset Management, recently gave a confluence of reasons why he remains bullish on the leading cryptocurrency.

He first drew attention to a chart from Deutsche Bank, the 17th largest bank in the world. It was estimated that the number of users of Blockchain Wallet (blockchain.com) could surmount over 200 million — around six times higher than where the sum currently is — by 2030.

Hauge also looked to the fact that the CEO of Bakkt has just become a U.S. Senator, meaning that Bitcoin could get its own cheerleader in Washington.

He also noted that BTC is “actually pretty close to where it should be,” in reference to a model that takes the number of “Bitcoin transactions ever confirmed and use that as an input into a log-scale linear regression model.”

 

Nick Chong

David – http://markethive.com/david-ogden

Bitcoin Bears Back on Bakkt Launch as Markets Tumble Again

Around $6 billion has been dumped out of crypto markets over the past few hours as the bears return again.has been dumped out of crypto markets over the past few hours as the bears return again. Coincidentally it has happened again, right after Bakkt launched more institutional investment products for Bitcoin.

Bitcoin Barrels Towards $7k

BTC charts were looking positive during late trading yesterday but the Asian session changed all of that. A brief spike above $7,600 was followed by a massive dump back to $7,270 according to Tradingview.com. Bitcoin is currently trading in the $7,350 range but analysts are growing increasingly bearish.

The wicks up have been a bearish test of resistance that was too strong to overcome and BTC is currently battling at the point of control according to analyst Josh Rager.

“Bitcoin is battling the POC at $7315 area and so far holding steady. Below that we’d want to look at the low of the value area – $7100s (sweep of low $7080)”

He added that the asset is still ranging in what could be an accumulation area. Yesterday’s mini-survey on CT resulted in a very even split of market sentiment from the 2,000 respondents though 53% were bullish.

The bottom in 2018 consolidated around or below $4k for almost four months in what was a painfully chilly crypto winter. If this really is the new bottom then BTC could range in this channel until February next year when halving FOMO revives it.

No Favors From Bakkt

Coincidentally this latest drop comes just after Bakkt launched more institutional investment products. The last time this happened was in late September when crypto markets dumped $10 billion following the launch of its BTC futures contracts.

Today markets are down over 21% from those levels and poised to drop below $200 billion again as the bears gather steam. There has been a lot of negativity towards Bakkt from the crypto community following yesterday’s launch of BTC monthly options and cash settled futures in Singapore.

Many feel that these products are providing more tools for institutions to suppress the price of the digital asset. Cash settled futures do nothing for Bitcoin as it is instantly liquidated back into markets on contract expiry.

Day one of trading started well with over a thousand cash settled contracts opened at ICE Futures Singapore according to the official Bakkt channel.

Elsewhere on Crypto Markets

As usual the altcoins have followed their big brother again in a tediously predictable pattern. The $6 billion market dump has seen no survivors but some are suffering more than others.

Ethereum has lost 2% to fall back below $150 again while XRP and BCH have done the same. Following an impressive weekend of gains Tezos is dumping hard today with a 6.5% slide and Cosmos is not far behind.

Today’s altcoin suicide though is MATIC which has just been obliterated 70% an hour or so ago.

 

Martin Young

David – http://markethive.com/david-ogden

Bitcoin Price Still on Track to Hit $6,200, Eerily Accurate Fractal Predicts

Bitcoin’s precipitous drop to $6,600 seen earlier this month caught many traders aback; nearly no one, not even the top traders and analysts, expected for that price action to play out as it did in real life. Few predicted the subsequent bounce to $7,800, where BTC sits as of the time of writing this, too.

Though, one trader has been calling the moves all along, using a lesser-known and slightly unorthodox method of analysis to predict the directionality of the Bitcoin and cryptocurrency market.

Related Reading: Eat My Shorts: Everything You Need To Know About The Bitcoin Bart Pattern

Bitcoin Fractal Implies 18% Drop

Over the past few months, a popular trader on Twitter, NebraskanGooner, has been touting what is known as a “fractal” via his social media pages.

A quick aside for those unaware of what a fractal is: a fractal, in financial markets, is when the historical price pattern or direction of an asset is reflected/seen again on a different time frame and/or for a different asset. While some analysts see them as pure coincidences, analyses have found that fractals can work well for Bitcoin and other cryptocurrencies, potentially due to the inherent cyclicity of this market.

The fractal predicted the cryptocurrency’s dramatic price drop to $6,600 weeks before it took place, and the subsequent recovery to nearly $8,000 seen a week or two back. Now, as Nebraskan recently pointed out, it shows that Bitcoin is about to fall off a precipitous cliff in the coming week or two, in a move that may bring the price of BTC to $6,200, maybe even lower. That would represent an 18% drop from current levels.

That’s not all. The analyst pointed out in a separate post that Bitcoin’s weekly chart looks bearish again in spite of the fact that a recovery was seen after the strong move lower. The analyst specifically remarked that BTC failed to break the key 99-week simple moving average and a horizontal zone of resistance, before adding that the “increased buyer volume” narrative is a clear misnomer and that the on-balance volume indicator saw a bearish retest.

With that in mind, the cryptocurrency trader remarked that he expects for Bitcoin to see a “slow bleed” lower, which will be marked by investors trying to buy the dip and then being stopped out, then a “fast dip with rapid absorption” in the $6,000s.

 

Nick Chong

David – http://markethive.com/david-ogden

Are Bitcoin Traders That Bought at $3-6k Starting to Sell BTC Now?

On-chain metrics can offer valuable insights into Bitcoin market movements and the latest data is showing that unrealized losses are mounting up. This could lead to a larger selloff as those that bought the dip in late 2018 fear for loss of profits now.

Bitcoin Selloff Resumes

Following the weekend’s push to close in on $8k, there has been a slide of almost 8% as the king of crypto retreats for the seventh time since late June. The correction from this year’s peak is currently 48% and analysts are suggesting that it is not over yet.

Chances of a ‘Santa rally’ are dwindling as the asset looks set to dip into the $6k region again this week. There may well be no recovery until the halving approaches in six months’ time, and that may even take a while to gather momentum.

On-chain data has been used to analyze estimated cost basis and 45% of investors are currently in the red. CIO of Point-Slope Capital Chris Russi has been looking at the figures and they do not bode well.

“While it’s been quite a drawdown from the ~$13k top in June, I still expect slightly more pain to push that # closer to ≥50% until we trend up again.”

A 50% figure would have a BTC price of around $6k which is where a number of technical analysts expect it to go. Mid-$5ks could also be possible as that is where the asset held for a month before initiating its huge rally up to $13,800.

Russi speculated that the largest capitulators have been those that bought the top. This was exactly what happened after the massive boom in early 2018, day traders dumping for fear of losing too much.

“Biggest capitulators during the draw down period have been top buyers @ ~$12K, recent dip buyers at ~$7.5K-$8K, and people locking in profits from catching the earlier bottom @ $3-$6k”

A scarier thought is another big selloff initiated by those that bought Bitcoin during the depths of crypto winter when it spent five months trading below $6k.

This would negate the premise that there has been more hodling occurring this time around and that institutional players have been stock piling the asset for product liquidity.

It stands to reason that anyone lucky enough to time the exact market bottom (which was just below $3,200 on December 15, 2018) would have been selling on the way up and would not have waited until now to offload.

A higher low is expected which would confirm that the long term trend is still intact and BTC is still heading upwards despite these massive peaks and toughs. If Bitcoin drops back into the $3k zone then the bear market that started almost two years ago is still not over.

 

Martin Young

David – http://markethive.com/david-ogden